Romania has made progress on a number of fronts, and it’s not a big surprise to us to see that the country has improved in global competitiveness, said Mark Mobius, Executive President of Franklin Templeton Investments in a post on his blog. He thinks that domestic demand should be the next growth engine for the country.

Romania moved up 17 places, from 76 to 59 in the “Global Competitiveness Report” recently released by The World Economic Forum (WEF). Mobius, who is one of the pioneer investors in emerging and frontier markets and has also been working on making these markets more popular for international investors, thinks that Romania needs to make more progress in order to become even more competitive.

“I think Romania’s compliance with the International Monetary Fund (IMF) in the past few years has been beneficial and has brought stability for public financing. We also see some positive developments in Romania in general; unemployment and interest rates are currently low, and disposable income is growing,” Mobius said.

He added: “That said, progress has been slow, and local consumption had been very depressed since 2008 and is just now starting to recover. Romania has made strides forward, but we think it still has a ways to go to become even more competitive globally. People were not really spending, so we think domestic demand is where the next growth engine of Romania could come from, on top of increased industrial production and exports.”

Franklin Templeton Investments has been managing Romania’s largest investment fund, Fondul Proprietatea, since September 2010. The fund was established by the Romanian state to compensate those who lost their properties during the Communist period, but is now controlled by foreign investment funds.

The fund had EUR 3.39 billion in net assets (NAV) at the end of August 2014 and holds minority stakes in several large state owned companies in the energy sector as well as in transports and postal services.

“As investors in Romania, we pay close attention to the implementation of proper corporate governance standards, and we believe it’s essential for state-owned companies to become more competitive and profitable,” Mobius concluded.

Fondul Proprietatea is also listed on the Bucharest Stock Exchange and has a market capitalization of EUR 2.92 billion.

Andrei Chirileasa, andrei@romania-insider.com